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Are federal rules making your energy efficiency goals cost more?

by Brianna Crandall — August 23, 2017 — A white paper released recently by New Buildings Institute (NBI) finds that federal preemption rules present a major barrier to using energy codes as a means to achieve high levels of energy efficiency in buildings. Decades-old federal laws that set national standards for appliance efficiency, including heating and cooling systems and water heating equipment, also preempt states and cities from setting their own more stringent standards.

NBI white paper finds that federal preemption rules present a major barrier to using energy codes as a means to achieve high levels of energy efficiency in buildings.

NBI, a nonprofit organization working to drive ultra-low and zero-energy performance in buildings, is a leading developer of model energy codes. Technical staff developed the white paper to fully understand the impact of federal preemption on the effectiveness of energy codes that call for these types of projects. The paper also works to identify and recommend solutions to address barriers imposed by the 40-year-old laws. Ultra-low-energy buildings combine technologies and controls in an integrated design that optimizes building energy performance. In many cases, these projects can be coupled with clean renewable generating resources, such as photovoltaics, to achieve zero-energy or even positive-energy buildings.

Local jurisdictions have found that raising standards over the three-year model energy code development cycles offer an effective strategy to help reduce carbon emissions and meet climate or energy policy goals. Buildings have emerged as a critical pathway because they account for about 40% of carbon emissions in the United States and up to 75% in cities, points out the report. The code mechanism has worked for many aspects of building design with the exception of “covered products” including appliances and heating and cooling systems, as defined by law.

NBI Director of Codes and Policy Jim Edelson, who is an author of the paper, stated:

Cities and states find themselves hamstrung when they try to use energy codes to help meet energy and climate action plan goals. Preemption won’t allow them to prescribe higher appliance and HVAC efficiency even though products with high levels of efficiency already dominate their markets. Moving to lift this barrier also would give policymakers the opportunity to provide additional paths to meeting energy and carbon reduction goals.

Innovation in building design and effective energy code development have driven higher levels of efficiency from windows, walls, lighting and more. That leaves a very large percentage of building energy use directly derived from covered products — studies estimate 78% of energy use in residences and 59% of energy use in commercial buildings was used by equipment fully preempted by federal standards. Potential natural gas savings are likewise limited in local energy codes because nearly all natural gas-using equipment is preempted. In its study, NBI found several key constraints presented by the federal rules, including:

Compliance confusion. Federal preemption does allow local and state codes to require more efficient equipment, as long as the code includes at least one combination of measures for products that do not exceed the federally mandated minimums. However, multi-path code approaches are both limiting and confusing for states and jurisdictions that want to significantly advance energy efficiency in the building sector.

Higher cost for design and construction. NBI combined an energy-saving analysis derived from computer modeling with costing data to estimate and compare the cost of including and not including covered equipment in achieving a beyond-code energy savings target for a medium-sized office building. While both scenarios resulted in a 10-15% better efficiency outcome, the high-efficiency equipment did so for more than $1.50 less per square foot — a significant reduction in compliance cost.

Outdated approach to building design. The metrics specified by federal preemption have a bias for single technology components and don’t take into account modern practice of integrating equipment, and distribution and control systems that allows for higher levels of efficiency. This aspect is of particular threat to the growing market for zero-energy buildings where integrated systems are essential in order to achieve ultra-low energy building performance targets.

Edelson explained:

More and more governments are enacting aggressive climate goals to mitigate emissions contributing to climate change citing the need to work towards zero-net-energy goals in their municipal and general building stocks to meet their climate goals. However, our current path to the development of ZNE building codes is constrained by the inability of energy codes to ensure that the more efficient equipment in the marketplace can be required in construction.

Options for addressing barriers presented by preemption range from approaches taken by Japan and Australia that set standards based on the best-in-market levels of efficiency achieved over longer timeframes, to setting system-based energy performance metrics as done in Singapore, to simply allowing states to work collaboratively on setting their own efficiency levels. Regardless of the pathway to a solution, it is clear that preemption places a hard limit on how far prescriptive codes can go to meet community and state goals, including climate action plans and ZNE targets for new buildings in the most cost-effective manner, the paper states.

Edelson concluded:

This unfortunate result of an outdated law not keeping up with the innovations in the HVAC and water-heating industries is creating unintended costs to consumers and local governments to accommodate the least efficient types of systems in energy codes. Given the significant energy and cost saving opportunities identified, now is the time to act and bring sensible reform to these outdated policies.